Barker et al v. Gottlieb et al

Filing 44

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS re: 19 . Signed by JUDGE LESLIE E. KOBAYASHI on 10/16/2013. Excerpt of Conclusion: "The Motion is GRANTED insofar as all of the claims in Plaintiff's Complaint are HEREBY DISMISSED. The Motion is DENIED insofar as the dismissal is WITHOUT PREJUDICE. Plaintiff may file his amended complaint by no later than November 27, 2013. This Court CAUTIONS Plaintif f that, if he fails to file his amended complaint by November 27, 2013, or if his amended complaint fails to cure the defects addressed in this Order, the claims that this Order dismissed without prejudice may be dismissed with prejudice.&quo t; (afc) CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
)
)
Plaintiff,
)
)
vs.
)
)
JOSHUA L. GOTTLIEB, JONATHAN )
DUBOWSKY, DONALD BORNEMAN,
)
)
CHARLES HALL, SCOTT HARRIS,
THE VALUE EXCHANGE ADVISORS, )
also known as/doing business )
as TVXA, GEMCO-PACIFIC ENERGY )
)
LLC, aka GPE and ROES 1-25,
)
)
Defendants.
_____________________________ )
CHARLES BARKER III,

CIVIL 13-00236 LEK-BMK

ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS
On August 5, 2013, Defendants Joshua L. Gottlieb,
Jonathan Dubowsky, Donald Borneman, Charles Hall, Scott Harris,
the Value Exchange Advisors, also known as/doing business as TVXA
(“TVXA”), and GEMCo-Pacific Energy LLC, also known as GPE (“GPE,”
all collectively “Defendants”) filed their Motion for Judgment on
the Pleadings (“Motion”).

[Dkt. no. 19.]

Pro se Plaintiff

Charles Barker III (“Plaintiff”) filed his memorandum in
opposition to the Motion on October 7, 2013.

[Dkt. no. 37.]

The

Court finds this matter suitable for disposition without a
hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice
of the United States District Court for the District of Hawai`i
(“Local Rules”).

After careful consideration of the Motion,

supporting and opposing memoranda, and the relevant legal

authority, Defendants’ Motion is HEREBY GRANTED IN PART AND
DENIED IN PART, and Plaintiff’s Complaint is HEREBY DISMISSED
WITHOUT PREJUDICE.
BACKGROUND
Plaintiff filed this action on May 15, 2013.1
Plaintiff asserts both diversity jurisdiction and federal
question jurisdiction based on the Securities Act of 1933, with
supplemental jurisdiction over state law claims.2
¶¶ 1-5.]

[Complaint at

Plaintiff describes the crux of the case in the

Introduction section of the Complaint:
The Defendants represented themselves to
Plaintiff be [sic] capable and adept project
financiers, with access to fiscal resources with
which to fund to multiple projects in Hawaii
relating to biomass energy and natural resources
development. The Defendants have not only
abjectly failed to provide this funding, but it
has since become revealed that Defendants had no
established access to such financial
resources . . . nor have they subsequently
developed any such resources. Moreover, what
funds as were eventually produced by Defendants
were at such an inadequate dollar scale, and
deployed by Defendants in a manner of their own
private decisions and choosings [sic], and wholly
absent of inclusion and consultation with the
project founder Plaintiff - who is a principal in
all relevant business matters and related entities

1

The Court notes that Plaintiff wrote the majority of the
Complaint in narrative form, without numbered paragraphs, in
violation of Fed. R. Civ. P. 10(b). Unless otherwise specified,
all references to the Complaint refer to page numbers.
2

Plaintiff also invokes the Racketeer Influenced and
Corrupt Organizations Act, [Complaint at ¶ 4,] but the Complaint
does not allege any claim under that act.
2

- that it resulted in no actualization whatsoever
of any of the business intents of the projects,
which included biomass-to-electricity, growing of
biomass crops and production of biofuel therefrom,
commencement of topsoil production and sales, the
closing of the 48.83 acre property purchase of the
biomass processing facility site at Haina Mill,
and the acquisition of the adjacent HEP (Hamakua
Energy Partners) power plant.
The Defendants knowingly and intentionally
pursued the conduct of the matters of the subject
corporate businesses in the exclusion of
Plaintiff, to the detriment of both the corporate
entities and to Plaintiff herein. . . .
[Complaint at 6.]

The projects at issue in the Complaint

include: a biomass-to-biofuel facility at the site of the former
Hamakua Sugar Mill, in Haina Camp on the island of Hawai`i
(“Haina Mill Project”); the development and marketing of a
1,100,000 cubic yard topsoil resource on one of parcels of the
Haina Mill property under the name Kama`aina Earth Products
(“KAEP” and “the KAEP Topsoil Project”); and the acquisition of
the Hamakua Energy Partners power plant (“HEP Power Plant
Project”).
Plaintiff is closely connected with several business
entities involved in these projects.

[Id. at 10-13.]

According

to the Complaint, Plaintiff “founded and registered the new
company Moku Nui Bioenergy Corporation” for the Haina Mill
Project, and he “founded and registered the new company Moku Nui
Power Company” for the HEP Power Plant Project.

3

[Id. at 12.]

In

addition, he and Defendant Dubowsky are “the sole two officers
of” KAEP.

[Id. at 13.]
Plaintiff alleges that Defendants entered into, and

subsequently breached, multiple contracts and agreements
regarding the projects, causing “loss of opportunity, plus
substantive and demonstrable financial harm to Plaintiff.”
at 7.]

[Id.

He also states that he “has expended extraordinary

amounts of time, effort, expenses, and . . . an extraordinary
amount of work product, . . . for the subject projects over the
preceding two years, with the clear understanding that Defendants
TVXA/GPE were acting earnestly, diligently and honorably, which
it is now evident that they were not.”

[Id. at 8-9.]

Plaintiff’s efforts in the pursuit of the projects included:
conducting research; attending meetings; providing data and
documents to Defendants; responding to Defendants’ requests for
information; submitting applications to local utility entities;
providing access to proprietary information from various entities
regarding biofuel processing; submitting bids; making
presentations; providing proprietary information and reports
about the HEP Power Plant; providing reports, information, and
analyses of relevant state and local laws; finding prospective
investors; preparing reports regarding the use of different
biomass products; investigating locations for other installations

4

necessary to the Haina Mill Project; and submitting proposals to
state agencies and private land owners.

[Id. at 16-19.]

Plaintiff relies primarily on three agreements:
1) an August 18, 2011 Letter of Intent between TVXA, which
“represent[ed] the interests of Scott Harris, Don Borneman
and Josh Gottlieb and affiliates[,]” and Cogentech PACIFIC, LLC, also known as CPL, which “represent[ed] the
interests of Garrett Smith, Chuck Barker, affiliates”
(“8/18/11 Letter of Intent”); [id., Exh. 1 at 1;]
2) a Joint Venture Agreement dated September 1, 2011 between GPE
and CPL (“9/1/11 Joint Venture Agreement”); [id., Exh. 2 at
1;] and
3) a letter agreement titled “Mana Makoaleo Energy Project (a/k/a
‘GPE 60’)” dated October 13, 2011 (“10/13/11 GPE 60 Letter
Agreement”) by GPE to CPL and Haleakala Holdings LLC
(“HCL”); [id., Exh. 3 at 1].
The 8/17/11 Letter of Intent and the 9/1/11 Joint Venture
Agreement relate to biomass-to-energy projects on the Island of
Hawai`i, [id., Exh. 1 at 1; id., Exh. 2 at 1,] and the 10/13/11
GPE 60 Letter Agreement relates to the HEP Power Plant Project.
[Id., Exh. 3 at 1.]

Plaintiff alleges that Defendants “have

failed to perform their functions with funding entities and have
failed to perform their functions and responsibilities as to the
financial aspects of the transactions.”

[Complaint at 15.]

For example, in October 2011, Defendants brought
forward Quartis Capital Partners (“Quartis”) as a viable funding
source for the projects, but Plaintiff recommended against
transferring any due diligence funds to Quartis.

Against

Plaintiff’s recommendation, Defendants transferred approximately

5

$400,000 to Quartis.

Plaintiff alleges that Quartis never

provided any due diligence and that Quartis was merely a scam.
[Id. at 15-16.]

In February 2013, Plaintiff secured a Letter of

Interest from a funding group offering a $9,200,000 loan for the
purchase of Haina Mill, along with funding for other purchaserelated expenses, and over $1,000,000 for improvements to the
property.

Defendants rejected the offer, but did not identify

any other sources of funding.

[Id. at 22.]

Plaintiff alleges that, ultimately, “Defendants failed
to provide the funding which they had committed to procure as the
financial partner, which caused such projects to not proceed.”
[Id. at 19.]

According to Plaintiff, the purchase contract for

the Haina Mill Project expired on June 30, 2013.

[Id. at 27.]

Thus, Plaintiff alleges that Defendants “breached their contract,
and have remained and further aggravated such breach at all times
hence.”

[Id. at 19.]

Plaintiff also claims that Defendants

misappropriated funds intended for the projects and that
Defendants engaged in the unauthorized use of the intellectual
property which Plaintiff, or others working with him, generated
for the projects.

[Id. at 9, 16-17, 26.]

According to the Complaint, or about March 1, 2012,
Garrett Smith for CPL tendered a formal notice of breach to
TVXA/GPE.

Afterward, Defendants allegedly “began a series of

continued, repeated and increasingly amorphous attempts to change

6

the relationship, which would be to the extreme detriment of
Plaintiff, and diminution of the ownership participation shares
of ownership by Plaintiff, and to alter the contractual
agreements between the Parties.”

[Id. at 20.]

Plaintiff alleges that, on February 5, 2013, he
received a proposed letter agreement from GPE, by Gottlieb and
Borneman, which “attempt[ed] to completely abrogate the
Defendants[’] earlier agreements and contracts” and “attempt[ed]
to demand[] 87.5% ownership of projects, as well as unilaterally
impos[ing] myriad additional, onerous, unreasonable and
unacceptable [to Plaintiff] terms . . . .”
alterations in original); id., Exh. 25.]

[Id. at 21 (some
Plaintiff states that,

after significant pressure from Dubowsky, Plaintiff agreed to
sign the letter agreement, with the reservation that it would
become void unless it was replaced within sixty days by a letter
agreement that was acceptable to Plaintiff.
Exh. 26.]

[Id. at 21; id.,

Plaintiff, however, did not receive any revised

agreements from Defendants.

[Id. at 26.]

Plaintiff alleges that

Dubowsky has been attempting to conduct business on behalf of
KAEP “without the consultation, inclusion or authorization of the
remaining principals and sole other officer of KAEP - the
Plaintiff herein.”

[Id. at 27.]

The Complaint alleges the following claims: fraud
(“Count I”); breach of fiduciary responsibility (“Count II”);

7

professional misconduct (“Count III”); violations of United
States securities laws (“Count IV”); misrepresentation (“Count
V”); malfeasance (“Count VI”); misappropriation of corporate
funds (“Count VII”); breach of contract; (“Count VIII”);
anticipatory breach of contract (“Count IX”); theft of real
property purchase contract (“Count X”); theft of intellectual
property (“Count XI”); negligence (“Count XII”); tortious
interference (“Count XIII”); and violation of interstate commerce
laws (“Count XIV”).
Plaintiff seeks to recover the following damages:
$23,100,000 related to biofuel and energy projects; $549,523
related to the KAEP topsoil/natural resources business;
$1,288,000 related to the Haina Mill property; $1,500,000 related
to approval of final plans; $2,000,000 for the theft of
intellectual property and/or work product; and $1,000,000 in
punitive damages.
$29,437,523.

The total damages Plaintiff seeks is

[Id. at 39.]

In addition, Plaintiff seeks costs of

suit, attorneys’ fees (if he retains counsel), and any other
appropriate relief.

[Id. at 40.]
STANDARD

Federal Rule of Civil Procedure 12(c) permits parties
to move for judgment on the pleadings.

“After the pleadings are

closed--but early enough not to delay trial--a party may move for
judgment on the pleadings.”

Fed. R. Civ. P. 12(c).

8

The standard

governing a Rule 12(c) motion for judgment on the pleadings is
“functionally identical” to that governing a Federal Rule of
Civil Procedure 12(b)(6) motion to dismiss.

United States ex

rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054
n.4 (9th Cir. 2011).

A court evaluating a Rule 12(c) motion must

construe the factual allegations in the complaint in the light
most favorable to the nonmoving party.
F.3d 922, 925 (9th Cir. 2009).

Fleming v. Pickard, 581

“Judgment on the pleadings under

Rule 12(c) is proper when the moving party establishes on the
face of the pleadings that there is no material issue of fact and
that the moving party is entitled to judgment as a matter of
law.”

Jensen Family Farms, Inc. v. Monterey Bay Unified Air

Pollution Control Dist., 644 F.3d 934, 937 n.1 (9th Cir. 2011).
Courts have applied the Ashcroft v. Iqbal, 556 U.S. 662
(2009), standard for Rule 12(b)(6) motions to Rule 12(c) motions.
See, e.g., Peelua v. Impac Funding Corp., Civil No. 10-00090
JMS/KSC, 2011 WL 1042559, at *2 (D. Hawai`i Mar. 18, 2011)
(“Following Iqbal, courts have applied Iqbal to Rule 12(c)
motions.” (citations omitted)); Point Ruston, LLC v. Pac. Nw.
Reg’l Council of the United Bhd. of Carpenters & Joiners of Am.,
658 F. Supp. 2d 1266, 1273 (W.D. Wash. 2009) (“The standard
applied on a Rule 12(c) motion is essentially the same as that
applied on a Rule 12(b)(6) motion[.]” (citation omitted)).
survive a motion to dismiss under Iqbal, “a complaint must

9

To

contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’”

Iqbal, 556 U.S.

at 678 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
570, 127 S. Ct. 1955 (2007)).

“[T]he tenet that a court must

accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions.”

Id.

Accordingly,

“[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.”
(citing Twombly, 550 U.S. at 555, 127 S. Ct. 1955).

Id.

Rather, “[a]

claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.”
(citing Twombly, 550 U.S. at 556, 127 S. Ct. 1955).

Id.

Factual

allegations that only permit the court to infer “the mere
possibility of misconduct” do not constitute a short and plain
statement of the claim showing that the pleader is entitled to
relief as required by Fed. R. Civ. P. 8(a)(2).

Id. at 679.

“Dismissal without leave to amend is improper unless it
is clear that the complaint could not be saved by any amendment.”
Harris v. Amgen, Inc., 573 F.3d 728, 737 (9th Cir. 2009)
(citation and quotation marks omitted).

“But courts have

discretion to deny leave to amend a complaint for futility[.]”
Johnson v. Am. Airlines, Inc., 834 F.2d 721, 724 (9th Cir. 1987)
(citation and quotation marks omitted).

10

DISCUSSION
I.

Federal Law Claims
Plaintiff alleges both diversity jurisdiction and

federal question jurisdiction, with supplemental jurisdiction
over his state law claims.

[Complaint at ¶¶ 1-3.]

Plaintiff

attempts to allege federal claims in Count IV and Count XIV.
Count IV, titled “VIOLATIONS OF SECURITIES LAWS OF THE
UNITED STATES,” alleges that:
Defendants Gottlieb, Borneman, Hall, TVXA and
GPE have committed multiple violations of the
Securities Act of 1933, as subsequently amended,
by violating subsections of Regulation D as
concerns the dissemination of information and
solicitation of capital investment, including
failure to produce and provide a Prospectus and
legally cognizable Offering Circular, by failure
to obtain and provide information concerning
Qualified Investors as defined by the Internal
Revenue Service (IRS) and the Securities and
Exchange Commission (SEC).
[Id. at 29-30.]

Section D, however, sets forth the Rules

Governing the Limited Offer and Sale of Securities Without
Registration Under the Securities Act of 1933.

The Complaint

does not allege that Gottlieb, Borneman, Hall, TVXA and GPE
offered and/or sold securities.

Count IV therefore fails to

state a plausible claim for violations of Regulation D.
Count XIV, titled “VIOLATION OF INTERSTATE COMMERCE
LAWS,” alleges only that “Defendants Gottlieb, Borneman, Hall,
Harris, Dubowsky, TVXA and GPE have violated U.S. Interstate
Commerce laws, in their attempts to conduct business in Hawai`i
11

via foreign corporations which are not licensed or registered to
conduct business in the State of Hawai`i.”

[Id. at 36.]

Count

XIV does not identify the specific laws Defendants allegedly
violated, nor does it state how Plaintiff was harmed by the
alleged violations.

Count XIV is therefore insufficient to

satisfy the requirement of Fed. R. Civ. P. 8(a)(2) that a claim
for relief contain “a short and plain statement of the claim
showing that the pleader is entitled to relief[.]”
Count IV and Count XIV are HEREBY DISMISSED.

In light

of Plaintiff’s pro se status and the fact that Plaintiff has not
previously tried to amend his Complaint, and because it may be
possible for Plaintiff to cure the defects in Count IV and Count
XIV by amendment, see Harris, 573 F.3d at 737, the dismissal of
Count IV and the dismissal of Count XIV are WITHOUT PREJUDICE.
II.

State Law Claims
The remainder of the claims in the Complaint appear to

allege state law claims.

Defendants argue that Plaintiff does

not have standing to pursue these claims because, to the extent
that such claims exist, only the business entities that
participated in the various projects have standing to pursue
them.

This Court agrees.
Whether this Court has diversity jurisdiction or

supplemental jurisdiction over the state law claims in the
Complaint, this Court applies state substantive law to such

12

claims.

See Mason & Dixon Intermodal, Inc. v. Lapmaster Int’l

LLC, 632 F.3d 1056, 1060 (9th Cir. 2011) (“When a district court
sits in diversity, or hears state law claims based on
supplemental jurisdiction, the court applies state substantive
law to the state law claims.”).
The Hawai`i Supreme Court has described the standing
analysis as follows:
“Standing is concerned with whether the
parties have the right to bring suit.” Mottl v.
Miyahira, 95 Hawai`i 381, 388, 23 P.3d 716, 723
(2001) (quoting Pele Defense Fund v. Puna
Geothermal Venture, 77 Hawai`i 64, 67, 881 P.2d
1210, 1213 (1994)).
It is well settled that the crucial
inquiry with regard to standing is whether
the plaintiff has alleged such a personal
stake in the outcome of the controversy as to
warrant his or her invocation of the court’s
remedial powers on his or her behalf. In re
Application of Matson Navigation Co. v.
Federal Deposit Ins. Corp., 81 Hawai`i 270,
275, 916 P.2d 680, 685 (1996). In deciding
whether the plaintiff has the requisite
interest in the outcome of the litigation, we
employ a three-part test: (1) has the
plaintiff suffered an actual or threatened
injury as a result of the defendant’s
wrongful conduct; (2) is the injury fairly
traceable to the defendant’s actions; and
(3) would a favorable decision likely provide
relief for plaintiff’s injury. Bush v.
Watson, 81 Hawai`i 474, 479, 918 P.2d 1130,
1135 (1996).
With respect to the first prong of this
test, the plaintiff “must show a distinct and
palpable injury to himself [or herself.]”
Life of the Land v. Land Use Commission of
State of Hawai`i, 63 Haw. 166, 173 n.6, 623
P.2d 431, 446 n.6 (1981). The injury must be
13

“distinct and palpable, as opposed to
abstract, conjectural, or merely
hypothetical.” Doyle v. Oklahoma Bar Ass’n,
998 F.2d 1559, 1566 (10th Cir. 1993)
(citations omitted).
Mottl, 95 Hawai`i at 389, 23 P.3d at 724, quoting
Akinaka v. Disciplinary Bd. of Hawai`i Supreme
Court, 91 Hawai`i 51, 55, 979 P.2d 1077, 1081
(1999). The requirement of a “distinct and
palpable injury” requires a plaintiff to have
suffered an “injury in fact.” Mottl, 95 Hawai`i
at 391, 23 P.3d at 726.
Hanabusa v. Lingle, 119 Hawai`i 341, 347, 198 P.3d 604, 610
(2008) (alteration in Hanabusa).
Plaintiff’s state law claims arise from various
activities related to the business projects described in the
Complaint.

The crux of Plaintiff’s state law claims is that

Defendants made misrepresentations about their ability to
perform, and ultimately failed to perform, their obligations
related to the projects.

The primary evidence of Defendants’

obligations are: the 8/18/11 Letter of Intent; the 9/1/11 Joint
Venture Agreement; and the 10/13/11 GPE 60 Letter Agreement
(collectively “the Agreements”).3

3

[Complaint, Exhs. 1-3.]

As

“It is well-settled that materials properly attached as
exhibits to the complaint and matters that are subject to
judicial notice may also be considered in evaluating a motion for
judgment on the pleadings.” Thomas v. Fin. Recovery Servs., No.
EDCV 12–1339 PSG (Opx), 2013 WL 387968, at *2 (C.D. Cal. Jan. 31,
2013) (citing Buraye v. Equifax, 625 F. Supp. 2d 894, 896–97
(C.D. Cal. 2008); Amfac Mortg. Corp. v. Ariz. Mall of Tempe,
Inc., 583 F.2d 426, 429–30 & n.2 (9th Cir. 1978)). Further, this
Court notes that, for purposes of the instant Motion, Defendants
do not appear to challenge the authenticity of the exhibits
(continued...)
14

previously noted, the 8/18/11 Letter of Intent is between TVXA
and CPL, the 9/1/11 Joint Venture Agreement is between GPE and
CPL, and the 10/13/11 GPE 60 Letter Agreement is between HEP,
HCL, and CPL.

Although Plaintiff may be a principal in CPL and

HCL (collectively “the LLCs”), Plaintiff himself was not a party
to any of the Agreements.

It is the LLCs themselves that have

standing to pursue claims arising from the Agreements.

Cf. Haw.

Rev. Stat. § 428-111(b)(1) (stating that, unless provided
otherwise in the articles of organization, an LLC may sue and be
sued).

Plaintiff acknowledges that the LLCs “may have separate

causes of action against the Defendants.”

[Mem. in Opp. at 4.]

In addition, even though Plaintiff is one of the
principals of the LLCs, he cannot individually pursue claims that
belong to the LLCs.

On a related issue, the Intermediate Court

of Appeals of Hawai`i (“ICA”) has stated:
“[S]tockholders . . . of a corporation do not
have the right to pursue an action on their own
behalf when the cause of action accrues to the
corporation.” Joy A. McElroy, M.D., Inc. v. Maryl
Group, Inc., 107 Hawai`i 423, 431, 114 P.3d 929,
937 (App. 2005) (internal quotation marks and
citation omitted). “Where the basis of the action
is a wrong to the corporation, redress must be
sought in a derivative action.” Chambrella v.
Rutledge, 69 Haw. 271, 280, 740 P.2d 1008, 1013
(1987) (internal quotation marks and citation
omitted). However, “[i]f the injury is one to the
plaintiff as a shareholder and to him
individually, and not to the corporation, as where

3

(...continued)
attached to the Complaint.
15

the action is based on a contract to which he is a
party, or on a right belonging severally to him,
or on a fraud affecting him directly, it is an
individual action.” Id. at 280, 740 P.2d at
1013-14 (internal quotation marks, citation,
brackets, and footnote omitted).
Combs v. Case Bigelow & Lombardi, No. 28773, 2010 WL 370275, at
*7 (Hawai`i Ct. App. Jan. 27, 2010) (alterations in Combs).

In

Joy A. McElroy, M.D., Inc., the plaintiff individual, Loi ChangStroman, signed a lease with an entity related to Maryl Group,
Inc. (“Maryl” and “the Lease”) in his capacity as an officer of
Joy A. McElroy, M.D., Inc. (“McElroy Inc.”).
27, 114 P.3d at 932-33.

107 Hawai`i at 426-

The ICA held that Chang-Stroman did not

have the right to sue Maryl “for any misrepresentation made to
McElroy Inc. that may have induced McElroy Inc. to enter into the
Lease.

There is no evidence in the record to indicate that

Chang-Stroman was negotiating for anyone but McElroy Inc.”

Id.

at 431, 114 P.3d at 937.
Similarly, even viewing the allegations in the
Complaint in the light most favorable to Plaintiff, all of the
state law claims appear to be based upon activities that
Plaintiff was involved in on behalf of the LLCs.

Neither the

allegations in the Complaint nor the exhibits attached thereto
indicate that Plaintiff was acting on his own behalf in the
events at issue in this case.

Thus, the injuries which allegedly

resulted from Defendants’ actions or inactions were injuries to
the LLCs, not to Plaintiff individually.
16

This Court therefore

concludes that the state law claims in the Complaint fail to
state plausible claims for relief because: 1) to the extent that
Plaintiff is trying to prosecute claims which belong to the LLCs,
Plaintiff lacks standing to do so;4 and 2) to the extent that
Plaintiff is trying to prosecute claims which belong to him
individually, the claims are not sufficiently pled.
Defendants’ Motion is GRANTED insofar as Plaintiff’s
state law claims are DISMISSED.

However, the dismissal is

WITHOUT PREJUDICE, in light of Plaintiff’s pro se status and the
lack of previous attempts to amend the Complaint, and because it
is arguably possible to cure the defects in the state law claims
by amendment.
This Court also notes that, if the LLCs or any other
business entity is added as a plaintiff in this case, the entity
cannot represent itself pro se, and Plaintiff cannot represent
the entity unless he is an attorney authorized to practice in
this district.

See Local Rule LR83.11 (“Business entities,

including but not limited to corporations, partnerships, limited
liability partnerships, limited liability corporations, and
community associations, cannot appear before this court pro se
and must be represented by an attorney.”); see also Simon v.

4

This Court emphasizes that, at the present time, it
expresses no opinion on the issue whether the state law claims,
as pled in the Complaint, would state plausible claims for relief
if the LLCs brought them.
17

Hartford Life, Inc., 546 F.3d 661, 664 (9th Cir. 2008) (“It is
well established that the privilege to represent oneself pro se
provided by [28 U.S.C.] § 1654 is personal to the litigant and
does not extend to other parties or entities.” (citation
omitted)).
CONCLUSION
On the basis of the foregoing, Defendants’ Motion for
Judgment on the Pleadings, filed August 5, 2013, is HEREBY
GRANTED IN PART AND DENIED IN PART.

The Motion is GRANTED

insofar as all of the claims in Plaintiff’s Complaint are HEREBY
DISMISSED.

The Motion is DENIED insofar as the dismissal is

WITHOUT PREJUDICE.

Plaintiff may file his amended complaint by

no later than November 27, 2013.

This Court CAUTIONS Plaintiff

that, if he fails to file his amended complaint by
November 27, 2013, or if his amended complaint fails to cure the
defects addressed in this Order, the claims that this Order
dismissed without prejudice may be dismissed with prejudice.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, October 16, 2013.

/S/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
CHARLES BARKER, III VS. JOSHUA L. GOTTLIEB, ET AL.; CIVIL NO. 1300236 LEK-BMK; ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS
18